Business Insider: Here’s One Way Brands Can Make Sure Their Ads Are Being Seen In The Right Places

Most online ad buys take place on “open exchanges” where the ads can end up anywhere on the internet. The advantage of a PMP is that it is a way for ads to be bought in an automated fashion, but in an exclusive, invitation-only setting. This brings some certainty into the equation. PMPs can also be called closed auctions, preferred deals, and invitation only auctions, among others.

Data management platform [x+1] explains the difference between open exchanges and private marketplaces using a Forrest Gump phrase.

[x+1] says an open marketplace is like a box of chocolates because you can never be sure what exactly you’ll end up with. You might get a delicious piece of milk chocolate filled with caramel. But on the other hand, you might end up with a dark chocolate piece filled with that gross, gooey cherry stuff.

With a PMP, it’s as if you have a box of only caramel pieces (the inventory you want) and there are no cherry pieces in sight. Advertisers can access premium, reserved inventory without worrying about the process of direct buys, which can take a lot more time and require direct contact with publishers or ad networks.

But there’s a risk with PMPs.

Sam Cox, vp of OPEN global media management at MediaMath, writes that marketers and publishers need to understand the entire programmatic landscape, including open exchanges. In a column for Ad Exchanger Cox writes open exchanges are great for “reach, discovery and attribution.” They can help publishers understand what their inventory is worth and who wants to buy it.

“Sure, private markets are great once you know what you want, but the constraints on volume can limit the conversion potential,” Cox writes.